Friday, March 20, 2009

By Jeffrey L Fox

Barack Obama came into office with campaign promises of keen interest to the biotech industry, including commitments to overhaul the US healthcare system, to lift restrictions on federal funding for human embryonic stem (hES) cell research and to increase focus and funding for science. But the economic crisis that weighs down the US economy, as well as skirmishes with the US Senate over key Cabinet and top-level appointees, has kept the new administration from dealing with much else during its first weeks in office. The anticipated changes in the healthcare system, if realized, are widely expected to lower the pricing of biological therapeutics by ushering in biogenerics, also known as follow-on biologics, sooner rather than later. Healthcare reforms also might introduce a system for evaluating therapeutic regimens on a cost and comparative-efficacy basis.

In addition to politically thorny issues embedded in healthcare reform, other more familiar matters regarding how well the US Food and Drug Administration (FDA) functions and whether it has strong leadership and adequate resources are attracting attention from those tracking biotech policy as this new regime settles in. Many other issues, however, remain unresolved and there is a general sense that continuity will reign until some bigger and more-pressing issues are under a semblance of control. Nonetheless, some Obama comments, including his strong endorsement of the value of science during the inaugural address, are lifting spirits among researchers inside and outside the biomedical sciences, including many within the biotech industry.

Positive signals

Even with little in terms of explicit biotech policies being spelled out since the election, diverse policy watchers who follow biotech developments express optimism about the Obama administration, its Cabinet and other changes in leadership, including in Congress. Thus, for example, Obama's anticipated change in policy that promises to provide strong and broadened federal support for research on hES cells is boosting morale among researchers across many sectors.

In practical terms, Obama can reverse Bush's restrictive stem-cell policy simply by means of an executive order. However, that approach risks leaving the issue open to further reversals by his successors. Another possibility is that Obama might join forces with Congress to push through legislation ensuring more-permanent federal support for hES cell research. If the votes are there, congressional staffers say, this issue might help build momentum to address other more challenging political issues, including healthcare reform itself. In February, Representative Diana DeGette, (D-CO) introduced legislation to authorize hES cell research and to provide for the development of guidelines for such research by the National Institutes of Health.

"Until they're ready for a public announcement, the Obama [administration] is very disciplined, and everyone is being careful" before formally changing the policy, according to Robert Cook-Deegan, director of the Center for Genome Ethics, Law & Policy at the Duke Institute for Genome Sciences and Policy (Durham, NC, USA). "Obama has said he'd like legislation, which is more permanent, but neither he nor DeGette is taking the possibility of an executive order off the table."

Jim Greenwood, president of the Biotechnology Industry Organization (BIO, Washington DC, USA) "applauds" Obama's intentions to change hES cell research policies at the federal level. Of course, Greenwood adds, getting this particular policy "right" is not enough to ensure commercial development. That kind of success will depend on many federal policies, including those affecting FDA, drug pricing, patents, taxes and the Small Business Administration. Broadening federal support for hES cell research, he says, is "just the beginning of a long process leading to lifesaving drugs."

Nonetheless, with a simple gesture that now could also be backed by legislation, Obama is poised to remove a nagging obstacle blocking researchers keen on moving forward in this biomedical subspecialty, which many see as highly promising. On a more symbolic level, this change also will help to repair a badly damaged breach between biologists and the White House, which also appeals widely to those working in other areas of science and engineering. "No doubt the [Obama] administration will be different in a good way, with a real commitment to medical research and science policy in terms of stem-cell research and for funding for the National Institutes of Health," says Michael Werner, who heads the Werner Group, a biotech consulting group (Washington, DC, USA). "And industry will see this as appropriate and necessary as the US tries to keep its competitive edge."

Perhaps Obama's arrival in the White House has already emboldened some federal regulators who deal with matters involving stem cells. Thus, before any explicit change in federal policy, FDA officials cleared Geron (Menlo Park, CA, USA) to begin a phase-1 clinical trial of GRNOPC1, an hES cell-based therapy, in patients with acute spinal cord injuries—the first such trial of its kind in the United States. FDA notified Geron that its investigational new drug application was being approved only a few days after Obama took office—timing that some observers suggest is not entirely accidental. "Geron's stem cell approval certainly suggests that some doors that have been closed for various reasons may be loosening now," says one insider following biomedical policy developments.

Policy shifts play out more broadly

"It is heartening to see the Obama administration embrace science as an important input of government and science policy as a driver of the American economy," says Thomas Murray, president of the Hastings Center (Garrison, NY, USA), which focuses on bioethics. "Instead of muzzling or ignoring science, it will sit at the table, along with the appointment of a set of remarkable science advisors."

"Obama is clearly a science buff, and is really, honestly, into knowing the facts, having them laid out, and then making the best choices that can be mustered," says a policy watcher who was close to the transition team but is outside the federal government. "It is a whole different approach compared to the 'How can we spin this information?' approach of the [Bush administration]. Back to 'honest-to-goodness' curiosity, which is, yes, incredibly refreshing."

Thus, there is solid enthusiasm for some of Obama's early choices for key Cabinet posts, including Nobelist Steven Chu, physicist from Lawrence Berkeley Laboratory (Berkeley, CA, USA), for secretary of the Department of Energy (DOE), and former Iowa governor Tom Vilsack for secretary of the US Department of Agriculture (USDA) as well as for high-level science advisors, such as Harold Varmus, also a Nobelist, president of the Memorial Sloan-Kettering Cancer Center (New York) and a former director of the NIH, and Eric Lander, who is founding director of the Broad Institute of the Massachusetts Institute of Technology and Harvard (Cambridge, MA, USA).

"We're jazzed," says an insider at DOE, referring to Energy Secretary Chu. "He's a great pick, and it's a huge boost to think of someone who can speak science to anybody—even to the OMB," he adds, alluding to the federal Office of Management and Budget, whose top officials in recent years have habitually blocked federal research or policy initiatives.

"With this president, a lot of policies are going to change, and a number of them are likely to be exciting for us," says Willy De Greef, secretary general of EuropaBio (Brussels). He points to USDA Secretary Vilsack as but one example of Obama appointments that look positive for biotech. The new USDA secretary "understands what biotech crops can do and has a deep interest in putting agriculture in play, including for energy independence and biofuels," De Greef says. Although no details are available, he adds, Vilsack's attitudes toward and familiarity with biotech-related agriculture issues "are very good for our sector."

The appointment of Vilsack is "nothing but positive for biotechnology," says Val Giddings, a Washington-based industry consultant and former USDA official. "There's not been an ag [USDA] secretary who comes in so familiar with biotech issues and who doesn't have to be briefed for the first time, but is favorably disposed to biotech for farmers. Plus, he respects data and evidence." As for Energy Secretary Chu, Giddings says, "He can't help but advance the [DOE] biotech portfolio. There will be greater openness, and it's nothing but positive."

Other positive changes anticipated

Before taking office, Obama's outreach to the scientific community was not limited to gestures about hES cell research. Shortly before the election, for example, he vowed to federal scientists—specifically, to scientists at the Environmental Protection Agency (EPA), who are represented by the American Federation of Government Employees—that "the principle of scientific integrity will be an absolute, and I will never sanction any attempt to subvert the work of scientists."

Members of the 111th Congress are also pledging support for policies that promote scientific integrity, aiming them at anyone working within the federal system or receiving federal support. In February, for example, the House of Representatives made the omnibus fiscal stimulatory legislative package a vehicle for instituting such policies. Thus, the House bill includes language that makes it an "abuse of authority" for anyone in federal agencies to take action "that compromises the validity or accuracy of federally funded research or analysis," disseminates "false or misleading scientific, medical or technical information," or restricts or prevents "any person performing federally funded research or analysis from publishing in peer-reviewed journals or other scientific publications or making oral presentations at professional society meetings or other meetings of their peers." Furthermore, an amendment to the bill protects government scientists who report efforts to "alter or suppress federal research." Incorporating these provisions into the final version of the stimulus package would broaden and extend Obama's campaign promise to all federal researchers.

Meanwhile, much in the rest of the stimulus package is less about symbolism and more about supplementary outlays, tax cuts and other financial resources to aid a beleaguered economy. There is plenty in the way of new resources being promised to support federal research programs across a broad range of disciplines.

Notwithstanding the political vulnerabilities of the specific proposals, the stimulus package includes a slew of concrete provisions that could benefit biotech on several levels. For example, it earmarks an extra $8.5 billion for the NIH to support extramural grants and contracts.

Other noteworthy provisions in the bill affect other agencies and programs within the Department of Health and Human Services (HHS): $400 million for the Agency for Healthcare Research and Quality to analyze the comparative effectiveness of medical treatments, with another $400 million funneled to NIH for comparative effectiveness research.

Outside HHS, DOE is slated for an infusion of $1.6 billion for science programs, with $800 million earmarked for research on biomass, whereas the National Science Foundation is to receive $3.0 billion. Furthermore, the National Institute of Standards and Technology within the Department of Commerce is being provided with $360 million for building research facilities and $220 million for scientific and technical research and services.

Shortages of private capital

These "pledges of increased federal money and getting the government back to supporting science are good for the biotech industry," says Arthur Klausner of Pappas Ventures (Durham, NC, USA), a venture capital (VC) investment firm. "More money for NIH and easing the embryonic stem cell research ban are all in the right direction."

Klausner is not alone among venture capitalists who count on the federal stimulus package to boost investments in federal research programs. The Washington-based National Venture Capital Association (NVCA), which represents 460 VC firms, recently urged congressional leaders to "invest in basic, long-term, discovery-oriented research and development," according to NVCA president Mark Heesen. Noting that federal R&D budgets in recent years were "virtually flat and occasionally declining," he and NVAC also called for the stimulus package to include "additional funding for key science agencies [to] enable the development of innovative technologies...."

Beyond the circle of federal R&D programs, however, the economic climate for research-intensive companies continues to be dismal. The virtual disappearance of capital in the private sector is proving especially burdensome on smaller companies, for which the path to initial public offerings is virtually "sealed shut," says BIO's Greenwood. Before and while the economic stimulus package was being negotiated, he was conferring with members of Congress on what he described as several "very dense tax policy matters," including R&D tax credits and zeroing capital gains liabilities to offset investments in biotech companies. Such financial breaks could bring near-term benefits to the industry.

The tax relief being sought is not a "bail-out," Greenwood says. Instead, it is something of a stopgap that would put tax credits into the hands of biotech companies to invest in R&D, buying time and keeping research teams working together until the credit markets thaw. Such measures make particular sense for the research-intense biotech sector, for which the timeline from idea to commercial product typically takes from 10 to 15 years before revenues from product sales begin to bring a return on investment, he says.

"The sickness of the capital markets is the main problem now facing biotech companies," says Mark Leuchtenberger of Targanta Therapeutics (Cambridge, MA, USA). "It's not that the 'window' for financing closed; the house fell down. This is like the 'nuclear winter' for biotech companies." Pointing to a recent merger-acquisition involving Pfizer and Wyeth, he predicts "further convulsions" throughout the pharma and biotech industries, including similar mergers involving many of the smaller biotech companies. Thus, he endorses efforts to change tax credit rules to benefit small companies even in the absence of their having current tax liabilities. "Allowing them to monetize is another area where government could do something meaningful for struggling biotech companies," he says.

"There were no IPOs [initial public offerings] in the last quarter, and there were a few acquisitions, but not much money from them because of the ridiculously low valuations," says Jenny Mather of Macrogenics (San Francisco). "Funding is way down, and it's a hardship for many companies. Some people think we're headed to a recovery, but until we're there, it's pretty grim and there are a lot of layoffs. There isn't much money going into the industry, and it won't regain its health until that happens."

One offbeat move to overcome current domestic capital shortages and attendant worries about declining price structures for biological therapeutics might be to look to Asia and particularly China for partners and markets, says Jie Liu D'Elia of BioBridge China in Seattle. As companies anticipate US healthcare reform, they will be seeking to "lower costs of prescription drugs," she says. "Companies will dig deeper and look for ways to cut costs by outsourcing to China, [where] a PhD level scientist costs at least 30–40% less than their counterpart in the US."

Plus, she adds, the Chinese market could become "a growth driver" as healthcare reform puts "negative pressure on the growth rate of the drug market in the US," which is expected to grow by 4.4% annually, compared with the Chinese drug market's projected annual growth of up to 17%. "I expect to see more leading biotech companies in the US and EU reach out to China either directly or via partnerships, instead of staying focused on the US domestic market," she says. "The economic climate and a combination of other forces, including the likelihood of healthcare reform, could prod companies to seek other outlets for their therapeutics as Obama takes office."

Uncertainty in healthcare reform

Early during the transition, Obama named former senator Tom Daschle to become secretary of HHS and also overseer of healthcare reform within the White House. Daschle, the lead author in 2008 of a book laying out a plan for reforming the US healthcare system, Critical: What We Can Do About the Health-Care Crisis, seemed poised to run with healthcare reform as soon as a majority in the Senate, a body he once led, confirmed his appointment. However, in early February, with a political uproar over his tardy payments of income taxes growing ever louder, Daschle withdrew from consideration, leaving the Obama administration to seek a new candidate to head healthcare reform efforts and also HHS and its many agencies, including FDA, NIH and the Centers for Medicare and Medicaid Services.

No obvious candidate appeared immediately, although as Nature Biotechnology was going to press, Kansas governor Kathleen Sebelius seems the most likely choice. Nonetheless, the administration is maintaining keen interest in pursuing healthcare reform, even if the economic crisis and Daschle's abrupt departure add further uncertainty as to when those reform proposals will be put forward. Shortly after Daschle withdrew, key Senate Democrats Ted Kennedy (D-MA) and Max Baucus (D-MT) reaffirmed plans to develop healthcare reform legislation.

Meanwhile, Congress also passed and Obama signed legislation reauthorizing the State Children's Health Insurance Program (SCHIP), promising to expand its enrollment to include 11 million children by 2013. Former President Bush had twice vetoed similar legislation, which authorizes federal payments that are matched with state funds providing health coverage. The rapid turnaround in February reflects some of the momentum Obama and Congress hope to bring to healthcare reform. "As I see it," Obama said, "providing coverage for 11 million children is a down payment on my commitment to cover every single American." Thus, although the timeline is even more uncertain than it was before the Daschle debacle, the commitment to reforming healthcare is not.

Expect follow-on biologics

In terms of healthcare reform, regardless of timing, "the President and Congress want something bold and universal, and it could cost trillions of dollars," says Greenwood. Because they also will need to seek "savings to pay for" that reform, he expects the Obama administration to review drug-pricing issues, even though therapeutics account for only a "small fraction" of healthcare costs, with "biologics a small subset of that." If healthcare reform leads the new administration to "squeeze down" prices, Greenwood is concerned about the risks of "starving the drug discovery" process.

"Healthcare reform will cost [biotech] in some ways, and I think it will be a front-end burden," says Klausner of Pappas Ventures. But the overall impact is difficult to predict if reforms lead both to "lower prices" but also to "more insured people so a greater volume of prescriptions." However, he adds, "If biotech becomes less attractive because the value of the enterprise is less, then less venture-capital investment goes into it, and that will hurt new company formation. How much is hard to say, but it won't be immediate."

"The weight and cost of regulation is inherently making new product development a very risky and expensive business," says EuropaBio's De Greef. "This one issue is the same for the US and the EU in the development of new drugs." A major source of those costs is clinical testing that is "not risk, but hazard based...[making] trials with unknown molecules and generics subject to the same administrative burden, and that's wasteful," he adds. Moreover, high costs and defensive testing help to "deny access to new drugs." One mitigating step, not "a silver bullet," would be to develop agreements permitting "more mutual acceptance of data," along with a "lot of other small improvements to cut costs."

Greenwood is continuing to visit key members of Congress, reminding them that even very costly biologics can provide healthcare savings, particularly when they alleviate chronic conditions. Thus, he calls it "criminal to enact public policies that limit explorations of that potential," namely development of new therapeutics, that bring both "humanitarian benefits and cost savings." Although biogenerics may be inevitable, Greenwood says that biotech companies should be entitled to "14 years of data exclusivity to recover their investments in drug discovery."

Some insiders following this debate wonder why some factions within the industry continue to resist follow-on biologics. Those who resist the onslaught of follow-on biologics are at risk of "showing hysteria about the replacement of 20-year-old proteins" and "have forgotten how to be optimistic" about innovative products, says one observer. With more than 600 biologics under development but fewer than 10 of them being approved per year by FDA, why spend so much time worrying about follow-on biologics? Bigger challenges for those developing therapeutic products lie elsewhere.

James Bianco, CEO of Cell Therapeutics (Seattle), calls it "bizarre" that there is still no US law allowing generic biologics on the market. "It works for small molecules, and it will work for biologics," he says. "This is one area that could be the first piece of healthcare reform legislation, especially with Waxman," he adds, referring to Representative Henry Waxman (D-CA), who recently wrested the chairmanship of the House Energy and Commerce Committee from Representative John Dingell (D-MI). Not only did Waxman play a key role in shepherding the Hatch-Waxman Act of 1984, the gateway for conventional generic drugs, he introduced a similarly minded follow-on biologics bill early in 2007, Access to Life-Saving Medicine Act, that is likely to be reintroduced soon.

Although Waxman is a "strong advocate" for such legislation, ironically his new responsibilities as chair of the committee may prove a "distraction" for him, according to Gregory Conko of the Competitive Enterprise Institute (Washington, DC, USA). Nonetheless, there appears to be "enough political will in the House and Senate to move follow-on legislation forward," he says. "I'd be surprised if the legislation is not passed soon, even in 2009 and surely within the first two years."

Several observers expect Senator Orrin Hatch, (R-UT), who joined forces with Waxman in 1984, to do the same with biologic follow-ons. Last year, Hatch, fellow Republican Senator Mike Enzi (R-WY), as well as Democrats Kennedy and then-Senator Hillary Clinton (D-NY), who is now Secretary of State, co-sponsored the "Biologics Price Competition and Innovation Act." Although not an official co-sponsor of that legislation, Obama was on record while in the Senate for supporting such legislative efforts.

That earlier Senate bill allowed for 12 years of data exclusivity for the brand company before a biogenerics product could be approved among other provisions. Some contend that Waxman will not go along with such prolonged exclusivity. So far, however, no one in the House or Senate has introduced a bill covering biologic follow-ons, although Anna Eshoo (D-CA) will reintroduce her bill (HR 5629, 110th Congress, Eshoo Barton Pathway for Biosimilar Biological Products), according to Erin Katzelnick-Wise, legal assistant to Eschoo.

Intellectual property and the FTC?

"Healthcare reform and patent reform dovetail," says Targanta's Leuchtenberger. "Even the staunchest defenders of biotechnology realize that it's subject to the same caveats as other sectors. But the bargain we've struck allows innovation to be rewarded."

In terms of patents and intellectual property (IP) issues, Arti Rai from Duke University Law School served as Obama's point person in this arena. Some observers see her as promoting reforms that could prove detrimental to both biotech and traditional pharmaceutical companies, making it more difficult and costly for them to obtain and then enforce patents.

There is also concern that proposed rule changes from the US Patent and Trademark Office that make it more difficult to obtain or enforce patents could prove harmful for companies. Furthermore, uncertainties from federal court rulings raise the concern that all claims of some patents could be declared unenforceable in cases where even the slightest information submitted to PTO is construed as misleading or inadequate. Meanwhile, if a patent reform bill that was sponsored last term by Democratic Senator Patrick Leahy (D-VT) and Orrin Hatch is reintroduced, Greenwood of BIO vows to work toward blocking it again.

For the moment, however, IP legislative reform is "a second order issue, and very hard to predict" in terms of timing before this Congress and the Obama administration, according to Duke's Cook-Deegan. During the last term, there was "a big push" for reform in Congress, with "software companies working in the information technology (IT) sector pushing hard" and others, including biotech and pharma, "suspicious of changes." Since then, various court decisions eased some of the reform pressure coming from the IT sector, he says. "There was a battle, and inertia won."

Assuming follow-on biologics become part of the biotech landscape, they could further encourage the Federal Trade Commission (FTC) to enter biotech territory, according to Greenwood and others. Thus, because FTC keeps an eye on generic and proprietary drug companies through its mandate to guard against anticompetitive practices, this oversight would likely extend to follow-on biologics. Late in 2008, FTC convened a roundtable on "Follow-on Biologic Drugs: Framework for Competition and Continued Innovation."

With another more muscular sign of interest in such matters, FTC filed a complaint in federal district court early in February, challenging agreements in which they say Solvay Pharmaceuticals paid generic drug makers Watson Pharmaceuticals and Par Pharmaceutical Companies to delay generic competition to Solvay's branded testosterone-replacement drug AndroGel. Although that suit involves conventional drugs, FTC appears not only interested in the economics of follow-on biologics but also ready and perhaps eager to enforce legislation that would promote the introduction of such products.

Concerns over comparative effective analyses

The economic stimulus package being considered in February included $700 million for the Agency for Healthcare Research and Quality in HHS to analyze the comparative effectiveness of medical treatments, with $400 million of that outlay reserved for NIH to conduct comparative effectiveness research. Some analysts, notably Scott Gottlieb of the American Enterprise Institute (Washington, DC, USA), consider such activities a threat to development of innovative therapeutics.

Gottlieb, a former official at FDA, argues that this approach of insisting on evaluating comparative effectiveness is modeled on the UK National Institute for Health and Clinical Excellence (NICE; London) whose hidden agenda, he says, is to "protect the British healthcare budget" by withholding lifesaving but high-cost new drugs from individuals. Such practices also "distort future investment decisions," he notes. "The last time policy makers waged a concerted effort to control the price of, and the access to, the most innovative but expensive new drugs as part of broader healthcare reform in the mid-1990s, the percentage of venture capital going into biotech fell by almost half in a single year."

Gottlieb also thinks it's important for the FDA to lower the threshold for diagnostic tests. rather than step-up regulations, as Genentech's (S. San Francisco, CA, USA) recent citizen's petition asked. Gottlieb believes a relaxation of oversight would enable doctors to target, or personalize, medicines to those most likely to benefit from them.

Others in biotech are also wary of the NICE model. "There is talk of a system like [NICE], which calculates cost-benefits and decides what to reimburse. We don't want to go there, and don't think Americans want to do that either," says Mather of Macrogenics.

Elsewhere, Murray of the Hastings Center thinks there is a middle ground to be found. "We don't have to think that the British have it exactly right to take their core message that we can't infinitely expand healthcare," he says. "Paying greater attention to quality care is not bad news for all biotechnology companies, and it may result in a shift in strategies to think more about cost effectiveness. And any sensible policy will give innovations a very important place. It is a challenge for companies...to strike a fruitful balance among quality, access and innovation. And I know people in the industry who will be eager to take on this challenge."

Muscular FDA may split in two

"How FDA functions is of huge importance, and we want this agency that regulates us muscularly funded and staffed," says Greenwood. "It is critical that our [product] applications are reviewed fairly, transparently and efficiently while meeting the gold standard of being safe and efficacious. It is critical that Obama appoint a commissioner who is confirmed by the Senate [and has] the confidence to manage FDA adroitly." For several periods during the Bush administration, FDA was led by acting commissioners—a practice that Greenwood considers "tragic" for the agency.

"Our key objective for the new administration is that it make sure there is a good and capable commissioner at FDA," says Alan Goldhammer, who is deputy vice president of regulatory affairs at the Pharmaceutical Research and Manufacturers of America (PhRMA, Washington DC, USA). "We will also work to ensure the agency has adequate resources to meet its public health mission, particularly reviewing new drugs in a timely manner."

"FDA deals with a huge number of products requiring review, which requires resources, but they have not kept up," says Leuchtenberger of Targanta. "Without a leader, they fall behind in recruiting. I think they could do much better." FDA is a "key agency for all of us, not just the biotech industry, and it being less politicized is a good thing," adds Murray of the Hastings Center. "But it desperately needs strong leadership and resources to boost morale."

Greenwood points out that FDA regulates products accounting for as much as 25% of the overall US economy, yet another reason for making sure that it runs smoothly and its leadership is in step with the White House. He would also like to see the "black box" of FDA demystified. "Even with [recent reform legislation], companies don't get enough meetings, and we're always scratching our heads," he says. "There is a lot of frustration when applications are denied, and we're always open to making FDA more efficient."

During the past year, FDA has been on a hiring and building binge as it prepares to move more operations into brand new office and lab space at its suburban campus, situated on the grounds of a former munitions depot. Moreover, the first-ever FDA chief scientist, Frank Torti, who became acting commissioner in January, began actively making the case last year for strong, in-house scientific expertise to support agency missions. Toward that end, FDA recently created a new position in the Office of Chief Scientist dedicated to coordinating activities involving genomics and related fields of science. The Obama administration is thought likely to continue these expanded efforts.

"On the food side, I expect biotechnology to be a fairly unimportant issue for the next couple of years," says Conko of the Competitive Enterprise Institute. Instead, he and others recognize that conventional safety issues, with the salmonella-laced peanut butter problem the most recent example, will be predominant. One exception directly involving biotech could be a move to reinstate a premarket notification rule for genetically engineered plants, a move that was blocked by Bush but could be brought back by the Obama administration. "There is no reason to think the [Obama] administration would go toward more deregulation, much to my chagrin," he says.

Meanwhile, Conko anticipates a "concerted effort to evaluate how FDA looks at general food safety" amid renewed talk of splitting it into two agencies. "The food people at FDA are really underfunded, and CFSAN [Center for Food Safety and Applied Nutrition] is seen as the ugly stepsister to the medical products side," he says. Experts have debated the possibility of separating those two FDA responsibilities into different entities for more than two decades, and there are plenty of obstacles standing in the way, he adds. "But I expect to see some congressional hearings and internal FDA investigations within the next two years."

Indeed, Representative Rosa DeLauro (D-CT) in February introduced a bill, HR 875, seeking to establish a separate "Food Safety Administration." Here again, despite such signs of renewed interest in separating food from drug and possibly splitting FDA into two agencies, Washington insiders provide plentiful reminders of how complicated and potentially contentious it will be to legislate that move. Even with bipartisan agreement, many congressional committees have partial jurisdiction over FDA programs, ensuring that such a restructuring effort will be a bureaucratic nightmare.

Bioethics stature likely to change

With hES cell research as part of the impetus, Werner, Murray and others expect the Obama administration to reestablish a broad-based bioethics commission. However it is recast, Werner says, it probably "won't lean on the biotech industry quite so much" as did President Bush's Council on Bioethics, particularly while Leon Kass served as its director. Biotech issues surely will come forward in a bioethics context, Werner says, but "not from the perspective that the industry is bad and immoral. With the intellectual curiosity of this administration, we'll see nuances and a thoughtful outlook on bioethics."

The Bush bioethics "apparatus is very unlikely to continue, just as Bush let Clinton's [National Bioethics Advisory Commission] expire," says Murray of the Hastings Center. "But what will take its place, I don't know." For now, delays in reformulating and rechartering such a body make sense politically and practically, he adds. "Bioethics issues of tremendous importance will be coming up, but most of them can wait a little while. I want my President to revivify the economy today."

Rick Weiss of the Washington-based Center for American Progress expects, like Werner and Murray, that the Obama administration will put together a bioethics commission with a broad mandate, one that will likely include issues such as "scientific integrity" and the "business of doing science," Weiss says. "I've not heard anyone suggest that they will pull business out of science, and public-private partnerships remain in vogue. But there are concerns in terms of transparency and conflicts of interest."

Congress will be part of this debate as well. For instance, Senator Chuck Grassley (R-IA) introduced a bill, S.301, in January calling for "transparency in the relationship between physicians and manufacturers of drugs, devices, biologicals, or medical supplies." The bill is formulated as an amendment to the Social Security Act, meaning it exerts jurisdiction over payments under the Medicare, Medicaid and SCHIP programs. In the House, Waxman is likely to take on similar issues, including conflict of interest and transparency, as it applies to biomedical researchers at NIH and elsewhere, as well as for physicians, according to Cook-Deegan.

Much as there is little definite yet known about the structure a bioethics forum will take in the Obama administration, not much can be said about who will be part of it. However, insiders point to R. Alta Charo of the University of Wisconsin, Jonathan Moreno at the University of Pennsylvania and the Center for American Progress, and Ezekiel Emmanuel, now at the OMB and formerly at NIH, as among the front-runners for such duties. Emmanuel also is mentioned as a candidate for HHS secretary.

Biofuels, biodefense and biocrop bickering

Beyond the metaphorical cold snap affecting the economic climate, Obama sees warming trends in the global climate as a different kind of high-priority threat, a point he reiterated soon after the November elections. What's more, the new president comes from Illinois in the Corn Belt, where corn-based ethanol is a major source of revenue for farmers throughout the region. Greenwood views this situation as an opportunity for biotech to play a "crucial role" in reducing greenhouse gases through biofuels, particularly by supplying technology for processing cellulose more efficiently.

With oil prices falling, biofuels programs may be on "autopilot" for the near-term future, according to Conko. Even so, and in agreement with Greenwood, he anticipates recent research initiatives, particularly those focusing on non-food sources for biofuels, to go forward under a broad agenda being managed by DOE Secretary Chu.

"We're enormously impressed with Obama's pick to run DOE; it speaks volumes," says Jonathan Wolfson, CEO of Solazyme (S. San Francisco, CA, USA), which is working on renewable energy and alternative chemicals development. He also speaks favorably of the EPA administrator-designate Lisa Jackson. "There were very dedicated 'lifers' at those agencies who care about the science," he says. "With new choices for leadership, we hope they will be free to go where the technology leads and make decisions based on hard science."

With oil prices hovering near "$40 per barrel and financial markets dormant, there are substantive challenges" facing his and similar companies working on alternative energy technologies, Wolfson admits. "But you have to recognize that climate problems and energy security have people concerned, and really need to be addressed. Our big hope is that [federal policy] will set out incentives in a technology-neutral way that is ends-driven—not dictating the type of fuel, but only that it reduces carbon. We think there will be policies to enable adoption of technologies from this space. Even if biofuels are now taking a beating, there are some advanced technologies that can provide real environmental benefits."

What happens with biofuel development ties in with developments and policies affecting agriculture and, here again, Obama's selection of Tom Vilsack for USDA secretary is drawing praise from biotech analysts. "Agbiotech is regarded as important, but let's have no illusions," says Washington-based consultant Giddings. "The economy and Middle East are first-tier issues, and Vilsack won't get Obama's attention for quite a while. And, even if they [administration officials] could be specific about agbiotech, they wouldn't because they will set it on the shelf and get to it once they deal with other stuff."

In terms of regulatory policies affecting genetically modified crops, little is expected to change anytime soon during the Obama presidency, except perhaps for a greater emphasis on transparency. "It is likely that the Obama administration will be more open than Bush's to a wide range of stakeholders," says Gregory Jaffe, who directs the Biotechnology Project at the Washington-based Center for Science in the Public Interest. More generally, the new administration is more likely to seek additional regulatory authority or even to ask Congress to amend laws in cases where rule-making becomes too much of a stretch for those already on the books. However, he adds, with so many other pressing food-safety issues to face having to do with microbially or chemically contaminated products, "I don't think biotech foods will be high on Obama's agenda."

"Expect more scrutiny of new varieties and more disclosures and transparency about biotechnology in food and agriculture," agrees Mark Mansour, an attorney with Bryan Cave (Washington, DC, USA). He, too, does not anticipate "much change" from recent policies in the near term, except for "some concessions to watchdog groups. But this will take a while, and will be expressed in due course."

One area where agricultural policy might change course is internationally, particularly with Secretary of State Clinton revitalizing international outreach programs, according to Mansour. This could take shape as an "aggressive engagement of USDA and USAID [Agency for International Development] with developing countries in Africa and other parts of the world, using agriculture as a means of engagement," he says. Unlike the Bush administration, for which such programs were, at best, "an adjunct to security, this [Obama] administration could see agricultural biotechnology as a constructive tool." Of course, "there will be obstacles to overcome, but a lot of opposition to biotechnology could melt with a prolonged recession."

"We're spending about $22 billion per year for the region [Africa], and candidate Obama called for doubling resources, and to put agricultural resources among the top ten," says Robert Paarlberg of Wellesley College (Wellesley, MA, USA), and author of Starved for Science: How Biotechnology is Being Kept out of Africa. "Science-based assistance does seem to have a voice." However, biotech will not soon make inroads into African agriculture because so many countries there remain dominated by Europe through custom and because Europe provides them much more assistance than does the United States, he adds. Thus, although USAID "has tried to throw its weight around, that doesn't work in Africa."

"The EU approach has helped keep African countries from adopting GM [genetically modified] crops," agrees De Greef of EuropaBio. "We hope if the EU and US become less adversarial, it could remove pressure from Africa, which feels forced to choose between US or EU regulations."

In terms of global agbiotech disputes, there are "tricky dossiers" to be faced, De Greef says. Even though the US won a round against the EU in a long-standing World Trade Organization (Geneva) case about genetically modified organism imports, "no official appeal" from the EU has been filed yet, he says. "If EU does not appeal or comply, the US, Argentina and Canada can take unilateral measures, but the US probably will prefer to negotiate, which seems more Obama's style. I'd like to see agreements rather than litigation, and a real victory would be to have science-based regulations."

Biodefense is another "critical" area for biotech companies, but "we haven't heard comments yet from Obama," Greenwood says. What's more, despite repeated efforts by the Bush administration to develop programs to meet the US Department of Defense and Department of Homeland Security needs, "companies can't get government to say what it's looking for. We chalk that up to relative newness and the general difficulties in dealing with government programs," he says.

Development of the biodefense slice of the biotech industry has been a "tortured" process through its early stages, says Gerald Epstein, a senior fellow at the Center for Strategic and International Studies (Washington, DC, USA). One major challenge from the outset was "how to get industry interested in government," he says. "How biodefense needs get filled is still a challenge. Some small biotechs were attracted but not pharma. Even after BioShield put money in a pot, it hasn't worked as intended." Meanwhile, increased funding through the omnibus stimulus package for the Biomedical Advanced Research and Development Authority (BARDA; Washington, DC, USA) within HHS, another segment of the sprawling federal biodefense initiative, could make BARDA a genuine "new player," even if it is still dwarfed by multibillion dollar NIH funding.

Epstein expects the Obama administration to approach biodefense policy and practices with "continuity." Current programs "won't change much, although BARDA might grow," he says. "For now, the administration continues to see the threat from weapons of mass destruction as true." But, figuring out how to organize such efforts is a looming challenge, he points out. "A lot of White House offices have something to do with these issues, and they will have to accommodate one another with this inherently broad subject. Right now biodefense looks balkanized, but maybe it will come together in the Office of Science and Technology Policy. For now, though, it's not a mainstream discussion."

Jeffrey L. Fox is a freelance writer based in Washington DC.

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